Commodity Research Report 17 July 2017 Ways2Capital .pdf
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BULLION METALS OUTLOOK GOLD -Increases in U.S. interest rates and expectations for higher global rates have “combined to keep a lid on precious metals
prices, Gold on MCX settled flat at 27845 for a second session amid little response to ongoing testimony from Federal Reserve
Chair Janet Yellen. There has been further mixed currency trading with only limited impact on gold, but a renewed increase in
bond yields has put some downward pressure on prices. The dollar remained on the defensive against the yen during the US
session on Wednesday, although there was choppy trading against the Euro with gold consolidating just above the $1,220 per
ounce area. During the European session there were source reports from the ECB that the central bank could plan to wind down
the quantitative easing bond-buying programme at the September meeting. The Euro regained some support following the reports,
although there was also a significant impact in reversing earlier declines in bond yields with a small net increase in European
bond yields into the US open. Now investors now looked ahead to more comments from the Fed chair, will testify for a second
day on the institution's monetary policy in front of the House Financial Services Committee. The Fed hiked rates at its June
meeting and stuck to its forecast for one more rate hike this year, but the subdued inflation outlook has since raised doubts over
whether the U.S. central bank will be able to stick to its planned tightening path. Technically Gold market is getting support at
27785 and below same could see a test of 27726 level, and resistance is now likely to be seen at 27930, a move above could see
prices testing 28016.
Chart Details -On the Above given daily chart of Gold in which we applied Bollinger Band along with Moving Averages From
a technical perspective, Gold prices broke above channel resistance defining the down trend since early June. From here, the next
layer of resistance comes in at 1239.60 (trend line support-turned-resistance, 38.2% Fibonacci retracement). A daily close above
that opens the door for a test of the 50% level at 1250.38. Alternatively, a reversal back below the 23.6% Fib at 1226.26 targets a
minor chart pivot at 1219.35, followed by the July 10 low at 1204.70. On MCX Gold market is getting support at 27785 and
below same could see a test of 27726 level, and resistance is now likely to be seen at 27930, a move above could see prices
Monday, 17July 2017
SILVER -Silver has posted a decline of 1.7% so far this year, compared with a year-to-date gain of 5.7% for gold GCQ7,
+0.78%. Silver tends to trade in tandem with gold, but its moves are often much more exaggerated given the fact that it’s a
much smaller market, making it a lot more volatile. Silver on MCX settled down -1.07% at 36571 after prices has gained in
three of the past four sessions to trade at nearly one-week highs. Prices underwent a major correction last week, including a
sudden flash crash that wiped as much as 11% off the grey metal’s value. The declines culminated in fresh 15-month lows on
Friday. Pressure seen after the MSCI world index hit a record high for the fourth time in less than a month as investors took
Yellen's remarks as a green light for risk-taking. Also China posted stronger-than-expected June trade figures, bolstering the
U.S. dollar, which advanced against a currency basket. The greenback earlier hit its lowest since last October after U.S.
Federal Reserve Chair Janet Yellen struck a less hawkish than expected tone in testimony before Congress on Wednesday. On
the contra Gold has been finding support from safe-haven demand amid political turmoil steaming out of Donald Trump Jr.'s
release of emails revealing the Trump administration's alleged connection with Russia. Adding to this, fading prospects for an
aggressive Fed rate tightening cycle, following Wednesday's perceived dovish testimony by the Fed Chair Janet Yellen further
reaffirmed by sliding US Treasury bond yields, was also seen driving flows towards the non-yielding yellow metal. Moreover,
persistent US Dollar weakness, which tends to boost demand for dollar-denominated commodities, remained supportive of the
metal's tepid recovery move back closer to weekly tops touched in the previous session. Investors now look forward to
Friday's important US macro data - monthly retail sales and the latest inflation figures, in order to determine the next leg of
directional move for the commodity .Technically Silver market is getting support at 36374 and below same could see a test of
36177 level, And resistance is now likely to be seen at 36924, a move above could see prices testing 37277.
Detail of Chart -On the Above given daily Chart of Silver Applied Bollinger Band and Moving Averages Along with
Parabolic SAR, All are Momentum Oscillators. From a technical perspective, Silver markets initially fell during the week, but
reached a bit of support just above the $15 level. As soft or than anticipated economic numbers came out of the United States
on Friday, the market turned around and therefore reached towards the $16 level. It now looks as if the $15 level will be
massively supportive, and if we can stay above there I think there is going to be a bit of a “buy on the dips” mentality, so I
think that the volatility will continue. I believe that the silver market should continue to be one that is difficult to handle, so
having said that I think that perhaps a nonleveraged position might be the best way to approach this market from a longer-term
perspective. This is because the volatility will of course cause massive fluctuations in account value. On MCX Silver market is
getting support at 36374 and below same could see a test of 36177 level, And resistance is now likely to be seen at 36924, a
move above could see prices testing 37277.
✍ MCX DAILY LEVELS
31- JULY -2017
✍ MCX WEEKLY LEVELS
31- JULY -2017
✍ FOREX DAILY LEVELS
✍ FOREX WEEKLY LEVELS
✍ NCDEX DAILY LEVELS
✍ NCDEX WEEKLY LEVELS
MCX - WEEKLY NEWS LETTERS
✍ INTERNATIONAL UPDATES ( BULLION & ENERGY )
Gold prices rose to two-week highs on Friday as weak U.S. inflation data added to doubts over whether the
Federal Reserve would raise interest rates for a third time this year. Gold futures for August delivery ended
up 0.95% at $1,228.88 on the Comex division of the New York Mercantile Exchange after rising as high as
$1,232.7 earlier, the most since July 3. The precious metal ended the week with gains of 1.32%. U.S.
consumer price inflation slowed to 1.6% in June from 1.9% in May, the Labor Department said on Friday.
Consumer spending was also weaker than expected, with retail sales falling 0.2% in June, compared to
expectations of a 0.1% rise. The Fed hiked rates at its June meeting and stuck to its forecast for one more
rate hike this year but the sluggish inflation outlook has raised questions over whether officials will be able
to stick to their planned tightening path. In testimony before Congress on Wednesday, Fed Chair Janet
Yellen said the economy is on a strong enough footing for the Fed to raise rates, but she also reiterated that
inflation is below target and noted that it is a particular “uncertainty” that could affect monetary policy.
Expectations that rates will stay low tend to boost gold, which struggles to compete with yield-bearing
investments when borrowing costs rise. The U.S. dollar index, which measures the greenback’s strength
against a trade-weighted basket of six major currencies, was down 0.69% to 94.9 late Friday, its lowest
trough since October 5. The weaker greenback boosted gold, making the dollar-priced commodity cheaper
for holders of other currencies.
Elsewhere in metals trading, silver futures rose 1.71% to $15.96 a troy ounce and notched up a weekly gain
of 2.38%. In the week ahead, investors will be turning their attention to the outcome of Thursday’s European
Central Bank meeting for fresh clues on when the central bank will shift away from its ultra-easy policy.
Monday’s data on Chinese second quarter growth will also be closely watched along with inflation data out
of the UK.
Gold prices jumped 1.4 percent to the highest level in nearly two weeks on Friday after data pointed to weak
U.S. inflation, reaffirming doubts that the U.S. central bank would again hike interest rates this year. U.S.
consumer prices were unchanged in June and retail sales fell for a second straight month. Bond yields
dipped and the dollar index .DXY slid to their lowest level since September 2016 after the weaker-thanexpected figures. Spot gold XAU= gained 0.96 pct at $1,228.61 per ounce by 3:01 p.m. EDT (1901 GMT)
after hitting $1,232.76. It was poised for a weekly gain of 1.3 percent, the biggest since mid-May. The U.S.
data bolstered expectations that the U.S. Federal Reserve would likely to move slowly to continue raising
interest rates in the absence of inflation signs. Some had been expecting another rate hike in 2017. Fed Chair
Janet Yellen's comments to the U.S. Congress this week "were more dovish than originally anticipated," said
David Meger, director of metals trading for High Ridge Futures in Chicago. Friday's "data reaffirms the
delay," he said. "We're seeing precious (prices) buoyed on the back of that." The most-active U.S. gold
futures GCcv1 for August delivery futures settled up $ 10.20, or 0.84 percent, at $ 1,227.50 per ounce. The
contract finished the week up 1.5 percent, its first gain in six weeks. The weaker greenback boosted gold,
making the dollar-priced commodity cheaper for investors holding other currencies. Ole Hansen, head of
commodity strategy at Saxo Bank in Copenhagen, said the chart picture had been damaged last week when
gold broke below its May lows, but bullion was now fighting back. "The key level is $1,230 on gold. In
order to turn neutral again we need to move back above that level," he said. Meanwhile, holdings at the
SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund fell 0.43 percent to 828.84
tonnes on Thursday from 832.39 tonnes on Wednesday.
Gold demand fell in India this week, with dealers offering a discount for the first time in one month despite
a correction in local prices as consumers advanced purchases in June before the rollout of a new nationwide
sales tax. Elsewhere in Asia, a spurt in buying was short-lived as global prices recovered from near fourmonth lows hit on Monday. Bullion dealers in India offered a discount of up to $1.20 an ounce this week
over official domestic prices MAUc1 , compared with a premium of $ 2.00 last week. The domestic price
includes a 10 percent import tax. Consumers bought more gold in the last week of June to avoid paying a
higher 3 percent rate under the Goods and Services Tax that came into effect from July 1. demand is very
weak. That's why even jewellers are trimming purchases,". Gold prices MAUc1 in India are trading at near
their lowest level in six months. India's gold imports in June more than tripled from a year earlier to 75
tonnes, but it could fall below 35 tonnes in July, consultancy GFMS said. market is oversupplied despite
lower imports in the first week of July. There is ample stockpile from last month's imports," said a Mumbaibased dealer with a private bank. In top consumer China, premiums were at $10.00 per ounce, compared
with the $9.00-$10.00 range last week, while in Hong Kong, the premiums were at 70 cents to $1.00 against
50 cents-$1.00 in the previous week. "There was quite a bit of physical buying when prices dropped, but
with prices going back up slightly around the $1,220 level, demand has stabilised," said a Singapore-based
dealer. The international spot gold benchmark XAU= was little changed around the $1,218 per ounce level
on Friday and was on track to register its first weekly gain in three, having recovered from Monday's
$1,204.45, the lowest since mid-March.
Gold prices edged higher in European trade on Thursday, nearing a one-week high following Federal
Reserve Chair Janet Yellen's congressional testimony to gradually raise interest rates. Comex gold futures
were at $1,222.49 a troy ounce by 3:18AM ET, up $3.40, or around 0.3%. Prices tallied a third-straight gain
Wednesday after Yellen sounded cautious on inflation and noted the Fed would not need to raise rates "all
that much further" to reach current low estimates of the neutral funds rate. She also said that the U.S.
economy is healthy enough for the Fed to begin winding down its massive $4.5 trillion balance sheet at
some point this year. The speech was seen as mainly dovish by market participants. The dollar index traded
down almost 0.3% at 95.31 in early trade, not far from the nine-month low of 95.22 plumbed in late June.
Yields of the benchmark 10-year U.S. Treasury fell to 2.32%, well off highs near 2.39% touched last week.
Investors now looked ahead to more comments from the Fed chair, will testify for a second day on the
institution's monetary policy in front of the House Financial Services Committee at 10:00AM ET . Besides
Yellen, Thursday's calendar also features PPI inflation data and weekly jobless claims, both due at 8:30AM
ET. Monthly CPI data is due Friday. The Fed hiked rates at its June meeting and stuck to its forecast for one
more rate hike this year, but the subdued inflation outlook has since raised doubts over whether the U.S.
central bank will be able to stick to its planned tightening path. Futures traders are pricing in around a 40%
chance of a hike by the end of the year, according to Investing.com’s Fed Rate Monitor Tool.The precious
metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such
Gold prices rose on Wednesday, edging further from this week's near four-month low after comments from
Federal Reserve Chair Janet Yellen curbed speculation that U.S. interest rates would rise more than once this
year. In congressional testimony, Yellen said that given current estimates the Fed would not need to lift rates
all that much further to reach a neutral level that neither encourages nor discourages economic activity. That
weighed on the dollar .DXY and U.S. Treasury yields, helping lift gold further from Monday's trough of
$1,204.45, the weakest price since mid-March. Spot gold XAU= was 0.24 percent at $1,220.26 per ounce by
3:02 p.m. EDT. The most-active U.S. gold GCcv1 futures for August delivery settled up $4.40 or 0.36
percent, at $ 1,219.1 per ounce. Prices had rallied as much as 1.8 percent from Monday's near four-month
low of $ 1,204. "Gold reacts negatively to a rising interest rate atmosphere, but there are limits to that," said
James Steel. Yellen's statements indicated that "tightening policies will not necessarily be abrupt," Steel said.
The dollar slipped and U.S. Treasury yields fell after Yellen's comments in what may be one of her last
appearances before Congress.
Gold prices edged higher in European trade on Wednesday, extending gains into a third-straight session, as
investors awaited comments from Federal Reserve Chair Janet Yellen for fresh cues on policy direction.
Comex gold futures were at $1,217.27 a troy ounce by 4:00AM ET, up $ 2.60, or around 0.2%. Prices
settled with a modest gain for a second-straight session on Tuesday. Yellen is scheduled to testify on the
economy before the Senate Banking Committee at 10:00AM ET (1400GMT) Wednesday. Text of the
testimony will be released 90 minutes before she starts speaking. Her comments will be monitored closely
for any new insight on the timing of the next U.S. rate hike and clues on how the central bank plans to pare
back its massive balance sheet. The Fed hiked rates at its June meeting and stuck to its forecast for one more
rate hike this year, but the subdued inflation outlook has since raised doubts over whether the U.S. central
bank will be able to stick to its planned tightening path. Fed Governor Lael Brainard on Tuesday suggested
her support for any future rate increases will depend in part on how inflation shapes up. Futures traders are
pricing in around a 50% chance of a hike by the end of the year, according to Investing.com’s Fed Rate
Monitor Tool. The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of
holding non-yielding assets such as bullion.
Spot gold rose on Tuesday, off the previous day's near four-month lows, as a drop in equities drove safehaven buying and the U.S. dollar retreated. Spot gold XAU= was up 0.23 percent at $ 1,216.79 per ounce by